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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Aggie who wrote (43436)	4/28/1999 2:06:00 PM
From: BigBull	Read Replies (1) \| Respond to of 95453

Venezuela to produce BELOW their quota this year?! To quote a recent top 40 hit "how bizarre, how bizarre" Energy News Wed, 28 Apr 1999, 2:01pm EDT N.Y. Crude Rises to 16-Month High as U.S. Supply Falls More Than Expected Crude Oil Rises After Imports, Inventories Decline (Update4) (Updates with oil company share rise in 7th paragraph, background on output cuts in 9th-10th paragraphs.) New York, April 28 (Bloomberg) -- Crude oil jumped more than 3 percent to a 16-month high after an unexpectedly large drop in U.S. inventories signaled that OPEC may be succeeding in its plan to trim production and reduce a global surplus. Inventories fell after a 17 percent decline in oil imports, the largest drop in five months, the American Petroleum Institute said. Prices are up 61 percent since mid-February, when world oil producers first proposed the output reductions. Shares of oil producing and drilling companies rose along with crude. ''The crude imports are finally down,'' said Chester Irvin, a trader at ABN Amro Inc. in New York. Saudi Arabia, Venezuela and other OPEC members ''really are sticking to their quotas.'' Crude oil for June delivery rose as much as 63 cents, or 3.5 percent, to $18.44 a barrel on the New York Mercantile Exchange. It was the highest intra-day price since Dec. 23, 1997. In London, June Brent crude oil rose as much as 52 cents, or 3.3 percent, to $16.32 a barrel on the International Petroleum Exchange. The drop in U.S. inventories comes three weeks after the start of oil production cuts engineered by the Organization of Petroleum Exporting Countries. The rising oil prices pushed oil company stocks higher as well. The Standard & Poor's index of international integrated oil companies rose 3.3 percent to 974.96. Chevron Corp. rose 3 to 101 15/16, Schlumberger Ltd. rose 2 5/8 to 62 1/2, Halliburton Co. gained 2 1/2 to 43 1/4 and Exxon Corp. rose 2 1/8 to 80 3/8. OPEC Cuts Working The 4.7 million barrel, 1.4 percent decline in U.S. oil inventories to 336.4 million barrels was more than four times analyst expectations. The decrease indicates that the April 1 production cuts are beginning to eat into inventories, which now are at their lowest since early March. Oil supplies in the U.S. are 6.64 million barrels lower than this time a year ago, according to the API. Saudi Arabia led the Organization of Petroleum Exporting Countries and independent producers Norway, Oman, Russia and Mexico in pledging to pump 2.1 million barrels less to reduce a worldwide glut. The agreement, made in March, was the third such production cutting plan by exporters in the past year. The total reductions now amount to 5.3 million barrels, or about 7 percent of world supply. OPEC's record in adhering to output reductions promised last year was spotty. OPEC members met 78 percent of those cuts in March, according to Bloomberg estimates. Venezuela Production Problems Production in Venezuela, one of the biggest exporters to the U.S. will fall below targets in the last half of the year, said Ali Rodriguez, the country's minister of energy and mines. Rodriguez said he was told by state oil company Petroleos de Venezuela SA that ''due to technical reasons, mostly maintenance, Venezuela's oil production will be less than (its OPEC quota of) 2.72 million barrels a day for the 3rd and 4th quarters of this year.'' Output would be less than 50,000 barrels a day below the target, he said. ''The fact that Venezuela undershot its quota at all is pretty remarkable,'' said Bill O'Grady, vice president, director of fundamental futures research, at A.G. Edwards & Sons in St. Louis, Missouri. ''I think Venezuela is a different place under (newly elected Venezuelan President Hugo) Chavez. He's in essence going to take Venezuela private and run the state oil company like a cash cow for the country. The idea that they're going to expand production and be the world's biggest oil company is now dead.'' Gasoline for May delivery rose as much as 1.6 cents, or 3 percent, to 54.20 cents a gallon. Heating oil for May delivery rose as much as 1.05 cents, or 2.4 percent, to 44.10 cents a gallon. -------------------------------------------------------------------------------- © Copyright 1999, Bloomberg L.P. All Rights Reserved.